Woglr september 2012
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IN THIS ISSUE The Draft Act to repeal the Schleswig-Holstein Gaming Act and adopt the Interstate Treaty on Gambling was submitted to the European Commission (EC) on 6 September, by the Government of Schleswig- Holstein, “stipulating that the Gaming Act [once revoked] will continue to be applied to licences that have already been granted,” said Matthias Spitz, Attorney at Melchers. “It is interesting that the government came to the conclusion that notification to the EC was necessary, given it will prolong the entire proce- dure and prevent a swift repeal,” said Spitz. “The EC now has three months to review the provisions and, if necessary, issue a detailed opinion to object to the provisions.” In the meantime licenses will continue to be issued. The EC “has no direct power to stop the govern- ment repealing the Act,” said Dr. Wulf Hambach, Partner at Hambach & Hambach. “However it can begin infringe- ment proceedings if the provi- sions contravene EU law.” Spitz thinks that “If the EC issues a detailed opinion, the draft act will most likely fail.” The Interstate Treaty on Gambling, which came into force in the other 14 Länder on 1 July, unlike the Gaming Act, “has been criticised by the EC, particularly because of the limitation of 20 licences and the exclusion of online poker and casinos,” said Dr. Sebastian Cording, Partner at CMS Hasche Sigle. “Instead of Schleswig-Holstein following the other states it might have been a better idea if the other states had followed Schleswig- Holstein.” “The Interstate Treaty is incoherent and not in confor- mity with EU law,”said Martin Arendts, Attorney at Arendts Anwalte. “The licensing proce- dure is a complete mess and certainly not in conformity with rules set out by the CJEU.” Arendts explains: “The licensing procedure has to be transparent and must be based on objective, non discriminatory criteria known in advance.” However, “the criteria for issuing the 20 Interstate licenses have not been published yet,” despite the application process being underway. “The Interstate Treaty is not transparent at all,” said Hambach. “Applicants are applying for licenses without any idea of the technical requirements, criteria or fees involved.” “Until the European Court of Justice decides whether the Interstate Treaty on Gambling infringes EU law there will be legal uncertainty,” said Cording. Hambach concludes, “Legal battles: that is my prediction for 2013.” A New York Federal District Judge ruled on 21 August that poker is mostly a game of skill, so does not constitute gambling under the Illegal Gambling Business Act (IGBA), in the case of United States v DiCristina. “Judge Weinstein’s validation of this position is likely to have a significant effect on the way in which other judges analyse these issues,” said David B. Deitch, Attorney at Ifrah Law. While Deitch believes that the Court’s decision “will add to the building momentum for legalised online poker in the US”, Frank Catania, President of Catania Gaming Consultants, referred to Judge Weinstein’s decision as a “surprise” but said that “it does not indicate that US lawmakers are warming to the legalisation of online poker.” Linda J. Shorey, a Partner at K&L Gates, observes that despite this non-binding decision, other Courts may reach “a different conclusion” on the issue. Besides, said Catania, the decision “will most likely be appealed and could be reversed by an appellate Court.” Despite the ruling, Lawrence DiCristina, who was arrested for hosting a no-limits Texas Hold’em game in a warehouse, was still found liable for prose- cution under New York State’s stricter state law. Judge Weinstein’s ruling “may be useful in states that apply a similar standard,” said Shorey. “But not all states define gambling in the same way or apply the same criteria to decide if an activity constitutes gambling.” For opponents of internet poker, “other federal statutes are available besides the IGBA.” Schleswig-Holstein notifies the EC to join the Interstate Treaty British betting operator Betfair filed a formal complaint with the European Commission (EC) on 10 September, regard- ing the recently adopted Cypriot gambling legislation, ‘which could lead to betting exchanges being prevented from operating in their current format in Cyprus,’ reads a state- ment by Betfair. “The complaint relates to interference with the freedom of services,” said Elias Neocleous, Partner at Andreas Neocleous & Co.“However, this is not an absolute freedom, the EC allows restrictions justified on grounds of public policy and security.” Betfair’s complaint states that any attempted ban on betting exchanges is discrim- inatory and a disproportionate breach of EU law. But, contin- ues Neocleous, “the Cyprus government maintains that it must observe the highest standards of protection against money laundering, and that betting exchanges pose an unacceptably high risk.” “If the ECJ finds that the gambling law is in contraven- tion of EU law the Cyprus Republic will be required to make amendments,” concludes Neocleous. “This could, however, take years to resolve.” Complaint filed against Cyprus gambling law US Judge’s ruling that poker is a game of skill “could be reversed” Match-fixing 03 Terms & Conditions The Spreadex case 04 UK Point-of- consumption tax 06 US iGaming update 09 Social Gambling Facebook’s app 10 EU The prohibition of foreign advertising 12 India The potential for online gambling 14 SEPTEMBER 2012
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gambling law Schleswig-Holstein
Transcript of Woglr september 2012
INTHISISSU
E
The Draft Act to repeal theSchleswig-HolsteinGamingActand adopt the Interstate Treatyon Gambling was submitted tothe European Commission(EC) on 6 September, by theGovernment of Schleswig-Holstein, “stipulating that theGaming Act [once revoked]will continue to be applied tolicences that have already beengranted,” said Matthias Spitz,Attorney at Melchers.“It is interesting that thegovernment came to theconclusion that notification tothe EC was necessary, given itwill prolong the entire proce-dure and prevent a swift repeal,”said Spitz. “The EC now hasthree months to review theprovisions and, if necessary,issue a detailed opinion toobject to the provisions.” In themeantime licenseswill continueto be issued. The EC “has nodirect power to stop the govern-ment repealing theAct,”saidDr.
Wulf Hambach, Partner atHambach & Hambach.“However it can begin infringe-ment proceedings if the provi-sions contravene EU law.”Spitzthinks that “If the EC issues adetailed opinion, the draft actwill most likely fail.”The Interstate Treaty onGambling, which came intoforce in the other 14 Länder on1 July, unlike the Gaming Act,“has been criticised by the EC,particularly because of thelimitation of 20 licences and theexclusion of online poker andcasinos,” said Dr. SebastianCording, Partner at CMSHasche Sigle. “Instead ofSchleswig-Holstein followingthe other states it might havebeen a better idea if the otherstates had followed Schleswig-Holstein.”“The Interstate Treaty isincoherent and not in confor-mity with EU law,” said MartinArendts, Attorney at Arendts
Anwalte. “The licensing proce-dure is a complete mess andcertainly not in conformitywithrules set out by the CJEU.”Arendts explains:“The licensingprocedure has to be transparentandmust be based on objective,non discriminatory criteriaknown in advance.” However,“the criteria for issuing the 20Interstate licenses have not beenpublished yet,” despite theapplication process beingunderway. “The InterstateTreaty is not transparent at all,”said Hambach. “Applicants areapplying for licenses withoutany idea of the technicalrequirements, criteria or feesinvolved.”“Until the European Court ofJustice decides whether theInterstate Treaty on Gamblinginfringes EU law there will belegal uncertainty,”saidCording.Hambach concludes, “Legalbattles: that ismy prediction for2013.”
A New York Federal DistrictJudge ruled on 21 August thatpoker is mostly a game of skill,so does not constitute gamblingunder the Illegal GamblingBusinessAct (IGBA), in the caseof United States v DiCristina.“Judge Weinstein’s validationof this position is likely to havea significant effect on theway inwhich other judges analysethese issues,” said David B.Deitch, Attorney at Ifrah Law.While Deitch believes that theCourt’s decision“will add to thebuilding momentum forlegalised online poker in the
US”,FrankCatania,President ofCatania Gaming Consultants,referred to Judge Weinstein’sdecision as a“surprise”but saidthat “it does not indicate thatUS lawmakers are warming tothe legalisation of online poker.”Linda J. Shorey, a Partner atK&L Gates, observes thatdespite this non-bindingdecision, other Courts mayreach “a different conclusion”on the issue. Besides, saidCatania, the decision“willmostlikely be appealed and could bereversed by an appellate Court.”Despite the ruling, Lawrence
DiCristina, who was arrested forhosting a no-limits TexasHold’em game in a warehouse,was still found liable for prose-cution under New York State’sstricter state law.Judge Weinstein’s ruling “maybe useful in states that apply asimilar standard,” said Shorey.“But not all states definegambling in the same way orapply the same criteria to decideif an activity constitutesgambling.” For opponents ofinternet poker, “other federalstatutes are available besides theIGBA.”
Schleswig-Holstein notifies theEC to join the Interstate Treaty
British betting operator Betfairfiled a formal complaint withthe European Commission(EC) on 10 September, regard-ing the recently adoptedCypriot gambling legislation,‘which could lead to bettingexchanges being preventedfrom operating in their currentformat inCyprus,’ reads a state-ment by Betfair.“The complaint relates tointerference with the freedomof services,” said EliasNeocleous, Partner at AndreasNeocleous&Co.“However, thisis not an absolute freedom, theEC allows restrictions justifiedon grounds of public policy andsecurity.” Betfair’s complaintstates that any attempted banonbetting exchanges is discrim-inatory and a disproportionatebreach of EU law. But, contin-ues Neocleous, “the Cyprusgovernment maintains that itmust observe the higheststandards of protection againstmoney laundering, and thatbetting exchanges pose anunacceptably high risk.”“If the ECJ finds that thegambling law is in contraven-tion of EU law the CyprusRepublic will be required tomake amendments,” concludesNeocleous. “This could,however, take years to resolve.”
Complaint filedagainst Cyprusgambling law
US Judge’s ruling that poker is agame of skill “could be reversed”
Match-fixing 03Terms & ConditionsThe Spreadex case 04UK Point-of-consumption tax 06US iGaming update 09Social GamblingFacebook’s app 10EU The prohibition offoreign advertising 12India The potential foronline gambling 14
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